Netherlands Medical Device Cluster - Institute for Strategy and
Transcript of Netherlands Medical Device Cluster - Institute for Strategy and
The Netherlands Medical Device Cluster
Microeconomics of Competitiveness
Professor Clayton Christensen
Chike Augh │Jeanne Dietsch│Brent Hire │Hironori Tateishi│Eng Dih Teo
May 10, 2013
Professor Michael E. Porter
Project Advisor: Professor Christian Ketels
Professor Clayton Christensen
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Table of Contents
1. Executive Summary…………………………………………………………………….…………3
2. The Netherlands and its Competitive Position…………………………………………………..4
2.1 Country Profile…………………………………………………………………………….4
2.2 Economic Performance and Social Development ..………………………………………5
2.3 Macro-economic Competitiveness……………………………………………………….6
2.4 Composition of the Economy and Cluster Performance………………………………….7
2.5 National Diamond Analysis………………………………………………………………7
2.6 Recommendations for Netherlands……………………………………………………….9
3. The Global Medical Device Industry and Outlook…………………………………………….11
3.1 Overview of Market Segments ……………………...…………………………………...11
3.2 Global Competitive Landscape and Issues………………………………………………12
3.3 Value Chain and Pricing Model………………………………………………………….13
3.4 Regulatory Process……………………………………………………………………….14
3.5 Outlook…………………………………………………………………………………...14
4. The Netherlands Medical Device Cluster………………………………………………………15
4.1 History and Evolution……………………………………………………………………15
4.2 Cluster Map and Specific Activities……………………………………………………..16
4.3 Cluster Highlights and Performance Analysis …………………………………………..17
4.4 Cluster Diamond Analysis……………………………………………………………….20
4.5 Comparative Analysis with Key Competitors and Mini Case Studies…………………..25
4.6 Recommendations for Medical Device Cluster…...…………………………………......28
5. Bibliography……………………………………………………………………………………...32
6. List of Interviewees and Resource Persons…………………………………………………….33
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1. Executive Summary
The Netherlands (NL), a country that has excelled for centuries in international trade, logistics and
innovation, is struggling to maintain competitive advantage in the global marketplace. As the rate of
globalization increases and the basis for differentiation shifts, declining export shares and weak FDI
flows are signs that the NL is responding too slowly to emerging markets and competition.
Cluster: Medical device is the nation’s leading cluster, one of four in which the Netherlands ranks
within the Top 5 nations globally.1 Nevertheless, the NL domestic market is small, which means that
products must be “born global” or fade away. However, the coherent cluster strategy, venture capital
and commercialization mechanisms and institutions for collaboration (IFCs) necessary to create this
essential bridge to continued prosperity and increasing wages are critically underdeveloped; an
ability to compete on cost has eroded, innovation is declining and an exodus of MNCs threaten long-
term competitiveness. Dependency on mature over emerging markets has left the country behind.
The findings of our in-depth industry research, case studies and interviews with subject matter
experts suggest opportunities to reinvigorate the cluster. However, this will require a concerted
effort by the private sector, national government, municipalities and the IFCs to improve factor and
demand conditions, leverage Netherlands’ connectivity and IT infrastructure to build new strengths.
This report proposes the following key recommendations:
NL Incentivize commercial banks to provide risk capital; public-private R&D partnerships
and leverage IT infrastructure to promote e-business models to help SMEs export
Leverage twin cities between NL and emerging markets as entry points for commerce
Increase internationalization efforts and pilot increased labor flexibility for MNCs
Integrate immigrants and promote diverse workforce as a source of competitiveness
Cluster Increase risk capital to SMEs with mix of tax credits and private capital; increase
government support for technology transfer offices and medical device incubators (led
by managers with private sector experience) to commercialize innovations.
Create industry events for medical device MNCs and cross-cluster actors to seek
partnerships with NL-based firms; Science Parks to coordinate FDI promotion.
Need to focus on innovation and non-product offerings and training to differentiate NL
firms. IFCs to increase overseas trade missions to enhance market access.
1 By comparing Export Value by Clusters, Harvard Business School Institute for Strategy and Competitiveness
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Fig. 2.1.1 Native Dutch and
non-Dutch population of
Amsterdam.
Source: City of Amsterdam
2. The Netherlands and its Competitive Position
The Netherlands (NL) has long outperformed its neighbors, but a global downturn, combined with
loss of oil revenues, social unrest, burdensome regulations and slow response to emerging markets
have hurt FDI and manufacturing. Meanwhile, an aging population, increasing immigration and
growing healthcare costs strain the nation’s budgets and traditional levels of social support.
2.1 Country Profile
The adversity of its terrain, 50% at or below sea level, and its central seaport
location for trade created a sophisticated nation of cosmopolitan merchants,
advanced scientists and multilingual seafarers.2 NL boasts six major seaports
along its 451 km coastline.3 Schiphol is Europe’s fourth largest airport. NL is
also a founding member of major institutions (EC, NATO, OECD, EU,
WTO) and the Hague is the world’s legal capital.
Population: With just 16.7 mil people, the country is ~80% native Dutch.
Population growth (0.45 %) is above the EU average. While Germans remain the largest immigrant
group, over 1 mil people from Morocco, Indonesia, and Turkey now live in NL cities (Fig 2.1.1).i
Compared with neighbors such as Germany, Dutch are 50% more likely to be non-religious (51% vs.
37%). One quarter of Amsterdam and Rotterdam are Muslims, higher than any other EU cities
except Marseille and Brussels, and growing.ii For the medical device cluster studied, religiosity and
religion can affect medical preferences. The official languages are Dutch and Frisian. However, due
to high levels of education (17 years of schooling) and legacy of international trade, most of the
population is trilingual: Besides Dutch, 70% also speak English and 60% German.
Political System and Legacy: Queen Beatrix abdicated in April 2013 in favor of her son, bringing a
rare change in the constitutional monarchy established since 1815. King Willem’s Argentinian-born
2 The Dutch refer to their unique consensus-based economic and social policy making approach as the “Polder Model”, named as a result of
cooperative approach required to adapt to the environment and “reclaim” 20% of its land from the sea. 3 The Delta Works project in 1953 reduced the length of the coastline by 700 km.
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wife, Maxima is an investment banker who plans to promote micro-finance.iii
Other aspects of the
NL have not changed for centuries: Since the 1200s, pumping systems protected “polders”
comprising landholdings reclaimed from the sea. Today, “polder” also refers to the extensive
negotiations by which government, institutes for collaboration (IFCs) and/or industry achieve
consensus. With no party winning majority since the 19th
century, coalitional governments require
consensus on national issues. 85% of workers are under collective bargaining agreements negotiated
at the industry-level.iv
While this labor system has social benefits, a potential cost is inflexibility.
Endowments: The Netherlands has developed its natural deep harbors into factor conditions to
support economic growth. It is also a petrochemicals hub exporting 250,000 barrels per day of oil
and gas products, a fifth of which is derived domestically from the North Sea. With dwindling
reserves, NL is expected to be a net oil importer by 2020, and a net gas importer by 2025.v
2.2 Economic Performance and Social Development
The NL was an EC founding member in 1957, but retained the guilder until Jan. 1, 2002. During this
period, North Sea oil was processed in Dutch refineries and the “Dutch disease”, a mix of “rent-
seeking”, high FDI and strong currency reduced the competitiveness of the manufacturing base. The
NL experienced strong economic growth following its adoption of the Euro, from $473bn in 2002 to
$709bn in 2012. However, the economy peaked in 2011 at $713bn. The NL enjoyed higher income
levels than EU-15 and the OECD, rising to over $38,000 US per capita before the 2008 recession.vi
Recovery has since lagged EU-15 and OECD. The rate of NL domestic patents has increased from
547 patents per mil people (ppmp) in 2002 to 641ppmp in 2012, but NL’s global position has
dropped from a high of 7th
(2004-2006) to 9th
in patents abroad since 2007.vii
The lack of VC funding
has constrained commercialization of innovations. Dutch are as productive per hour as Americans,
but clock fewer hours (1400 hrs. vs. OECD average of 1800 hrs.). Despite having the 11th
highest
global FDI stock, FDI flows have plummeted to 20% of 2000 levels. 20-30% of FDI flows go to
natural resources and unique to NL, capital flows for offshore activities are ~20-25 % (Fig. 2.2.1).
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Social and Political Institutions (SIPI) - The NL scores well at 4th
globally for HDI, and has
historically used taxes and social transfers to lower GINI coefficients (e.g. from 0.57 pre-transfers to
0.25 for retirees >65 yrs; 0.39 to 030 for persons 18-65 yrs). With the Euro crisis, lowered oil
demand and cheap US shale gas, NL oil revenues dipped, manufacturing began its exodus and FDI
dropped simultaneously. Planned transfers in health and social services had to be cut. With
globalization, Netherlands has not escaped the worldwide increase in terrorist activity. Despite a
tradition of tolerance, civil unrest and fear of immigrant dominance has surfaced, especially in major
cities where >50 % are foreign-born. SIPI (immigration and integration) is an issue for NL.
2.3 Macro-economic Competitiveness
The NL’s inflation of about 3.25% is above the
2 % European Central Bank benchmark and
higher than that of US and Germany. This erodes
real wage growth. Nonetheless, public debt of ~
50% of GDP is lower than the US and well-
below Italy’s unsustainable levels.4 The macro
outlook is improving, with decreasing public
4 Eurostat; Economist Intelligence Unit, European Central Bank, US Bureau of Labor Statistics, Tradingeconomics.com
Fig. 2.3.1: NL Inflation, Public Debt and Public Deficits
Fig. 2.2.1 FDI flows and Breakdown Source: OECD Statistics Database, International Monitor 2011 CBS,Team Analysis
sNetherlands
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deficits in recent years. This augers well for the macro competitiveness for NL, and improves the
long-term ability of the NL government to continue funding social transfers and incentives for
economic growth. There could be some near-term volatility as the government is undecided whether
to continue austerity measures. Given this backdrop, the key question for the Netherlands is whether
the NL is merely suffering from a pervasive international recession intensified by EU debt woes or
did the recession and drop in oil revenues reveal structural weaknesses in the Dutch economy?
2.4 Composition of the Economy and Cluster Performance
NL ranks in the Top 5 exporting nations globally in four clusters (including the US$15 bil Medical
Device cluster). However, between 2000-2010, 2/3 of NL’s top exports lost market share, with only
medical devices and production technology showing anemic growth at ~1.5 %. Since the
introduction of the Euro and a common EU market, NL firms have been increasingly reliant on the
EU for exports. EU demand is now a high 81 % (2010) of NL’s external trade and this over-reliance
is a structural issue
that will dampen
growth prospects
given the EU
financial crisis.
Fig. 2.4.1: NL’s World
Export Market Share vs.
Change in NL’s World
Export Market Share
2.5 National Diamondviii
Analysis
The Diamond (Fig. 2.5.1) highlights numerous assets that reflect the Netherlands’ sound economic
fundamentals and high living standards. Given the lackluster cluster performance in the past decade,
the discussion will primarily focus on the areas where NL has challenges:
Factor Conditions: Within the EU, NL has the highest internet penetration (94% of households) and
the largest no. of broadband connections (38.4 per 100 inhabitants).ix
NL has the greatest number of
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undersea Internet cable drops per capita globally which is conducive for internet businesses.While
the NL economic policies are sound, NL has not necessarily invested in the seeds of dynamism. Two
main areas of concern are the relatively low R&D spending (half that of OECD levels) and the lack
of risk capital. The bulk of NL’s R&D spending is by the private sector (Philips and ASML with
>2000 R&D employees with annual budgets > €400 mil) x
but this varies with the companies’
profitability. Public-funded institutions such as ECN (energy) and Deltares (environment) have
specific interests and smaller budgets of ~€100 mil. Given limited resources, public-private R&D
models could help bridge efforts to support leading clusters. The lack of startup financing was a
recurring theme in our interviews. Commercials banks have ceded this space to VCs and private
equity firms; banks such as ABN AMRO conduct only 30 VC deals a year on average.
Demand Conditions: While EU entry has led to enhanced market access for NL-based firms, the
80 % over-reliance (compared to 70 % for Germany and 60 % for UK) on EU markets will dampen
NL’s growth prospects more than its neighboring competitors given the anemic EU growth rates.
Context for Firm Strategy and Rivalry: NL’s attractiveness for FDI traditionally relied on low tax
rates (corporate tax 20-25 % and below EU average, 5 % for R&D activities, 0% withholding taxes),
network of 80 double tax avoidance treaties and advance tax rulings that provide clarity and
certainty; NL need not place bets as these policies attracted offshore activities and FDI from different
Fig 2.5.1: National
Diamond Analysis
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sectors. As factor conditions weaken and EU demand drops, NL suffered from an exodus of MNCs
in recent years. This exodus, in turn, weakens the CSR and dampens the growth of RSIs. The exodus
is significant as MNCs account for ~1/3 of NL’s output and ~17 % of employment. The government
has adopted a different FDI attraction model since 2010 to focus on 9 top sectors5 and could
differentiate NL going forward. Labor inflexibility6 is another impediment for FDI. 85% of workers
are under collective bargaining agreements, most negotiated at the industry-level.xi
2.6 Recommendations for Netherlands
Issues: NL’s lagging economic recovery reveal structural weaknesses. Weak factor conditions and
CSR, coupled with an over-reliance on EU markets will undermine NL’s growth prospects and limit
NL’s ability to balance budgets and provide social support. The NL must improve the quality of the
business environment to attract and retain MNCs, and promote SMEs. The competitiveness
challenges identified lead to 3 key questions and corresponding recommendations are summarized in
Fig. 2.6.1: (a) For NL society: (Q1 – coded red) Can NL sustain social support and harmony?
(b) For NL-based SMEs: (Q2 –coded blue) Can they compete internationally?
(c) For NL-based MNCs: (Q3 –coded green) Why is their presence decreasing?
Challenges/Opportunities Recommendations Responsible
Party
Priority
(1 is highest)
SIP
I
Increasing spending
demands and social instability
A. Integration initiatives
for immigrants, especially in
Amsterdam and Rotterdam
with > 50 % foreign
populations
A. Ministry of
Economic Affairs; Ministry
of Social Affairs and
Employment
2
FC
Difficult to match
innovations with funds
Relatively low R&D
spending compared to
OECD levels
B. Mix of tax credits and
matching dollars to cover
risks of defaults to incentivize
commercial banks to enter the
risk capital space
B. Ministry of
Finance, Ministry of
Economic Affairs;
Rabobank, ING. ABN
Amro etc., engage royal
leadership
1
C. Public-private R&D
partnerships, particularly in
applied research
C. Public R&D
(TNO, ECN etc.) and
private R&D (ASML etc.)
1
5 These top sectors are creative industries, logistics, horticulture, agro & food sector, life sciences, energy, water, chemicals and high-tech. 6 Employer can only terminate employment contract after Work Placement Branch of Employee Insurance Agency (UWV WBERKbedrijf) grant permission, a process that takes ~3 mths and thereafter notice period applies with a max of 1 mth reduction in notice period due to process time.
A
B
C
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Fig. 2.6.2 Prioritization Matrix
Opportunities to leverage
internet infrastructure for e-
businesses to expand markets
D. IT incubators to
promote e-business
models to assist SMEs
expand beyond NL
D. Ministry of
Economic Affairs, IFCs,
university incubators
1 D
C
Small domestic market
leads to over-reliance on EU
markets
E. Leverage twin cities
between NL and emerging
markets as entry points for
r trade missions
E. Institutes for
Collaboration (IFCs),
Dutch municipalities;
engage royal leadership
1
CS
R
Fewer MNCs based in
Netherlands along with
falling FDI flow below
OECD levels
F. Pilot schemes for
increased labor flexibility for
industries with large MNC
presence
F. Ministry of
Economic Affairs, IFCs,
MNCs; engage royal
leadership
1
En
do
wm
ents
Domestic Oil & Natural
Gas resources will decline;
net oil & gas importer by
2025
G. Promote energy
efficiency (e.g. through
accelerated depreciation for
capex in energy-efficient
equipment); training of
energy managers and drafting
of energy conservation plans
G. Ministry of
Economic Affairs;
Ministry of Infrastructure
and the Environment;
IFCs, Energy Research
Centre (ECN) of
Netherlands
2
Fig 2.6.1: Summary of Recommendations for the Netherlands. Priority 1 - < 6 mths, Priority 2 - < 1 year
The recommendations are ranked based on a weighted
assessment of their impact and the ease of
implementation,7 and their prioritization reflected in Fig.
2.6.2. The color codes of the recommendations tag to the 3
key questions. G covers both MNC and SMEs. The
recommendations are detailed: SIPI (A): As economic
troubles in the Eurozone create increased pressure on
public finances, the safety net that has defined the Dutch
way of life may give way and have disproportionate impacts on underserved populations, e.g.
immigrants. Integrating these communities will lessen chances of social instability.
Factor Conditions (B,C,D): Commercial banks need to be incentivized (e.g. through co-sharing of
default risks) to provide lending to jumpstart SMEs, with royal leadership. Given budgetary
constraints, the NL government could use a mix of tax credits and matching funds to seed more
venture capital firms, along the lines of the initial efforts of the Israeli government in the beginnings
7 For assessing ease, the 4 criteria were degree of political support required, degree of behavior change required, multiplicity of actors involved, and
whether it is an extension of existing schemes. For assessing impact, the 2 criteria were potential impact and spillovers, and sustainability of the initiatives over time to engender further innovations. Each criterion was valued from 0 to 1 and weighted average was used to compute the final levels.
F
G
D
E
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of their venture capital industry. To synergize R&D efforts and build a healthy pipeline of new
products, the public and private funded entities could work on joint projects to support leading export
clusters and seek international partners. SMEs can also leverage excellent IT infrastructure to offer
new services (e.g. high-resolution video feeds) and expand beyond the small domestic market. IFCs
can work with university incubators such as Yes!Delft to provide consulting and training to SMEs.
Demand conditions (E): The small Dutch domestic market leads to an overreliance on the EU as the
main Dutch export market. Many Dutch cities have twin cities in emerging markets such as Turkey
(Bergama, Istanbul etc.), South Africa (Pretoria etc.), and China (Wuhan, Tianjin etc.). IFCs can
leverage celebrations to organize trade missions for SMEs to these twin cities (which are likely more
predisposed to NL goods and services) as entry-points to these high-growth markets.
Context for Firm Strategy and Rivalry (F): The Netherlands has suffered from an exodus of
multinationals in recent years. To address labor inflexibility, the NL government can explore
concessions with MNCs to increase labor flexibility for industrial sectors that compete globally and
those that have a large MNC presence in NL (e.g. oil and gas, electronics, medical devices etc.).
Endowments (G): As NL will become a net oil and gas importer by 2025, NL can sensitize
companies early to increasing energy constraints and higher energy prices by promoting energy
conservation and energy efficiency. This will also help NL firms manage their carbon emissions
within the EU Emissions Trading Scheme; the oil and gas cluster can also provide new services (e.g.
energy management services that draw on NL strengths in analytics and IT) as new revenue sources.
3. Global Medical Device Industry and Trends
3.1 Overview of Market Segments
Medical devices span broad categories, from high-tech, high-cost diagnostics and therapeutic
equipment, to also basic supplies and devices that keep health facilities running consistently.xii
The key product categories and drivers of purchase are:
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a) High volume/high value: Diagnostic substances driven by specialization – in vitro and in
vivo substances used by trained personnel to diagnose or monitor the state of human health.
b) Small volume/high capex (more than €100k): Medical equipment driven by multiple
disciplines and preferences of senior decision-makers - surgical, X-rays and imaging machines.
c) Small volume/high value: Wheelchairs and furnishings driven by innovation and reliability
– e.g. manual or automated wheelchair, removable armrests and footrests and related accessories.
d) High volume commodities: Medical and dental instruments and supplies driven by
innovation, account management for replacements and costs – e.g. autoclaves, surgical tools.
e) Small volume commodities: Ophthalmic goods driven by functionality and cost – e.g.
frames, lenses and eye protection lenses, moulded glass blanks, lens coating, grinding and goggles.
The traded medical device market was valued at over $150 bil (2010). The NL was the world’s 4th
largest exporter ($14.8 bil), after the U.S. (~$40 bil), Germany (~$27 bil), and China (~$15 bil).xiii
3.2 Global Competitive Landscape and Issues
The global medical devices industry is highly concentrated, with the top 15 players accounting for
~ 61 % of worldwide sales. While US players dominate the global market, 8 of the top 15 device
players have operations in the Netherlands, with activities from R&D to distribution. Two issues are
critical for exporting countries such as the Netherlands (NL):
(i) Out-sourcing and Off-shoring of R&D and Production – Global medical devices companies
have downsized operations in mature developed markets to be closer to higher growth emerging
markets. Medtronic for instance, downsized in US and Europe and shifted its international HQ,
heads of global manufacturing and emerging markets business development to Singapore in 2009.xiv
(ii) Increased Access to Healthcare by Developing Countries – Global healthcare expenditures
range widely currently from US$ 10 to US$ 7000 per person. As emerging markets develop, the
WHO expects large surges in global market demand, but estimates that as high as 70 % of the more
complex devices imported do not function in these developing countries due to a lack of capacity.xv
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3.3 Value Chain and Pricing Model
As the global ageing population expands and the burden on healthcare system increases, price
sensitivity drives the need for value-added and innovative products instead of incremental
improvements. For the value chain (Fig. 3.3.1), the higher end (€10k to more than €100k) segment of
the value chain covers products such as diagnostics, medical equipment and wheelchairs, while the
medical and dental instruments and ophthalmic goods are increasingly commoditized.
R&D activities conducted in-house previously have been supplemented by alternative models of (i)
technology and innovation acquisitions through M&A, and (ii) R&D outsourcing to trusted partners
and institutions to enhance delivery of value-added products. Educational institutions such as
universities and private research laboratories take part in clinical testing to enhance product efficacy.
A Deloitte Pricing Surveyxvi
indicates that compared to cost-plus and competitive pricing used by
most manufacturing industries, value-pricing (willingness to pay which is a proxy for gross margins)
is currently the dominant pricing model for the devices industry. There is little bulk purchase:
Affinity with existing suppliers contributes to the high willingness-to-pay model. The distribution,
marketing and sales processes require strong brand recognition, account management (with decision
makers in hospitals) and resource investments. Thus, many MNCs such as MSD and Phillips own
their own marketing & sales departments and use transfer pricings to rationalize the margins between
Fig. 3.3.1: Medical
Devices Value Chain
(Team Analysis)
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manufacturing process and product distribution. For SMEs and producers of niche products, it is
challenging to own a proprietary marketing & sales network; these firms use independent distributors.
3.4 Regulatory Process
Medical devices need to pass stringent regulatory requirements for commercialization in each
market. Companies are responsible for applying and meeting requirements such as labeling,
packaging and post-sales monitoring. Regulatory certainty therefore plays a critical role. In the EU,
manufacturers certify each product with a Notified Body, an independent institution accredited by a
Member State to evaluate compliance based on EU Medical Devices Directivesxvii
. After the
certification, the manufacturer may label the products with the CE Mark which is required for EU-
wide distribution and sales. In the US, the Food and Drug Administration (FDA) is in charge of
approving or permitting each medical device product. The approval processes vary widely depending
on the product category. The EU has a competitive advantage in faster time-to-market: The average
approval time (2010) of these pre-market notifications (510 (k) processes is generally 31 months in
the US compared to 7 months in the EU. Pre-market approvals usually take 54 months in the US and
11 months in the EU.xviii
Besides these product approval processes, ISO standards such as ISO
13485, ISO 10993 and ISO 14971 also assure the production quality of medical devices.
3.5 Outlook
Customers will put increasing premiums on cost-benefit analyses of products rather than brand
recognition. On the regulatory side, the US-EU FTA negotiations is in its infancy, but given the
potential to increase market access, regulatory convergence and mutual recognition of product tests
are high-priority issues. This will require manufacturers to increase information disclosure on the
tradeoffs between quality outcomes and costs. To retain the ability to value-price, the key question
for the NL medical device cluster is: Do these firms have a steady pipeline of innovative products
that meet the needs of cost-conscious consumers and can they quickly bring them to market?
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Fig. 4.1.1: Early History and Selected Exhibits
(Source: Museums Boerhavve and Rijksmuseum)
Fig. 4.1.2: Evolution of Medical Device Industry
(Source: Leiden BioSciencePark, Company Websites)
4. Netherlands Medical Device Cluster
4.1 History and Evolution
The Dutch medical device cluster dates back to the Golden Age of the 16th
and 17th
centuries. The
keen sense of observation reflected in Rembrandt’s masterpieces shone in Dutch development of
tools for maritime navigation, medical and anatomical research, and skilled crafts such as glass-
blowing and cutting, all of which influenced the
development of medical devices still preserved
in Dutch museums. Indeed, modern medical
devices such as the electrocardiogram and
microscope were invented by the Dutch (Fig.
4.1.1).The early clustering of medical research
and device-making around Leiden led to the
development of a BioScience Park in 1982, and
similar medical technology parks sprouted around the 8 academic hospitals. Despite government
incentives, the financial
crisis and the
weakening competitive
position have led to a
spate of acquisitions
and job losses.
(Fig.4.1.2) R&D
consolidation is
worrisome as this impacts the pipeline of new devices.
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4.2 Cluster Map and Specific Activities
The cluster has a breadth of industry entities – 1935 device manufacturers and 35 associated
hospitals/private R&D laboratories.xix
These actors synergize with related clusters such as ICT,
biopharma, healthcare and analytics, and support a host of industry-specific suppliers ranging from
medical accessories producers to tailored ICT/Engineering services. Service providers include
telemedicine providers, and health insurance firms. These insurers may also be considered
customers, and are determined to pursue collaboration with hospitals to allocate high capex medical
devices and to encourage self-care and telemedicine. SMEs are key to cluster growth but there is
limited
specialized
risk capital
from venture
capital and
private equity
firms.
Creating the context for the cluster are EU European Medicines Agency and national regulators
(VWS, IGZ). The medical device firms nucleate in 7 distinct locations (Fig 4.2.1) around educational
institutions such as the University of Leiden, science/R&D parks such as Utrecht Science Park and
the 8 academic hospitals. These institutes and R&D centers focus on different market segments and
provide a pipeline of innovations that are commercialized by the core manufacturing firms. While
there are many IFCs, most are focused on the professional development within the Netherlands.
Fig.4.2.1:
Cluster Map
(Team
Analysis)
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Task Force Healthcare8 is the primary IFC for internationalization. Collectively employing over
10,000 people, the cluster is characterized by small independent manufacturers which have a few
new products under development, and 8 MNCs (including Dutch national champion, Philips) that
have research and development, production or regional headquarters in the Netherlands (Fig. 4.2.2).
4.3 Cluster Highlights and Performance Analysis
From 2000-2010, the Netherlands (NL) gained export share in each of the five device sub-clusters:
medical equipment, diagnostic substances, wheelchairs and medical furnishings, ophthalmic goods,
medical/dental instruments and
supplies. While their current export
levels are high as the world’s 4th
largest exporter of devices, the NL’s
ability to gain market share trailed its
major competitors in every sub-cluster
8 Formed 1996, registered as a foundation 2001 FME-CWM Association, Holland HealthTech, Philips Healthcare, Drager Medical Netherlands, Simed International, AMPC, Maastricht Uni, Royal Tropical Institute that improves healthcare infrastructure in developing countries by using Dutch expertise.
Fig.4.2.1: Locations for Medical Devices Firms and Specialization
(Team Analysis) Fig.4.2.2: Dutch-based MNCs (The Decision Group)
Out of top 15, 8 (in blue) are Dutch-based MNCs
Fig. 4.3.1: Performance of NL Medical Device Subclusters
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except for diagnostic substances. For more commoditized goods (below €10 000) such as ophthalmic
goods and medical/dental instruments and supplies, outsourcing and off-shoring of production has
led advanced developing countries to overtake NL. For wheelchairs and medical furnishings which
require some customization, NL’s strongest competitors are its neighbors. For the high-value medical
equipment, NL’s export share growth has lagged that of Germany and China.
Medical Equipment Ophthalmic Goods
Medical/Dental Instruments and Supplies Wheelchairs and Medical Furnishings
Fig 4.3.2 NL’s World Export Share and Change in Export Share (2000-2010) vis-à-vis Competitors
Source: Institute for Strategy and Competitiveness
Within the NL medical device cluster, Philips Medical Systems is the top choice for employees,9 and
median annual salaries (€ 45000 - €72000) for employees in medical device SMEs (employment
<200) are on par with those working in MNCs. This underscores the importance of a vibrant SME
9 Payscale Research for Salary Profiles for Medical Devices Cluster (Median wages by company size, skill sets) updated April 2013.
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cluster in NL to offer similar-paying jobs to MNC workers who are retrenched. The Medical Device
median annual salaries for research scientists, clinical research specialists and product development
engineers (€ 33 300 - 39400) are half that of business managers (€ 70 000 per year), indicating a
strong demand for commercialization skill-sets. While comparative wage data is not available for
the EU, the location quotient (LQ)10
is a proxy for job concentrations and export-orientation amongst
the medical clusters, namely: Germany, the Netherlands, Belgium, Italy, Poland, Denmark, and
France. From Fig. 4.3.3, Germany is the clear EU leader. Within NL, the North Netherlands area
(Groningen) and the Southeast (Limburg) area has higher concentration for medical devices.
Fig 4.3.3: Location Quotients of EU Medical Device Industries (2011 data). Source: EU Cluster Observatory
The presence of other large medical device clusters in the EU creates steep competition for Dutch
firms as they try to sell into their most adjacent markets. This is particularly demanding for Dutch
small and medium-sized enterprises who must export almost immediately from inception to grow
given their small domestic market. As such, a strong pipeline of innovative products supported by
commercialization infrastructure and risk capital is critical for NL-based firms. Overall, the NL
medical cluster export levels are high globally, but their growth rates have been low (< 2 %) in all
10 The Location Quotient (LQ) is a ratio measure of the concentration of a cluster in a particular location relative to the national average with an LQ > 1 indicating higher than average concentration in that location and used a proxy for export-orientation.
20
sub-segments. Except for diagnostic substances where NL’s growth of 2 % is on par with global
leaders, the NL has lost its edge in ophthalmic goods and medical/dental instruments and supplies
and is struggling to keep up for the higher end wheelchairs and furnishings and medical equipment
segments. The US and Europe will still remain the largest markets in the near team; the 5-year
medical device CAGR for such mature markets is estimated to be 7.5 % vs. 15 % for emerging
markets (World Medical Markets Factbook, 2010).xx
NL has to be substantially plugged into
emerging markets to raise its low growth rates of < 2% to maintain its competitive position.
4.4 Cluster Diamond Analysis
The NL Medical Device cluster inherits many of the aforementioned national strengths such as a
strong education and healthcare investment and world-class infrastructure. It also inherited some of
the national deficiencies such as inflexible labor markets. The cluster diamond is shown in Fig 4.4.1:
Factor conditions: The cluster draws strength from the strong legacy of excellence in medical
devices which has been supported by specialized education and training. At locations like Leiden,
Wageningen for instance, the NL has had undergraduate and graduate education focused on life
Fig 4.4.1: Cluster
Diamond Analysis
21
Fig 4.4.2: Medical Devices in Development
Source: The Decision Group, Team Analysis
sciences and medicinal research with the University Medical Centers. A key weakness in their factor
conditions is a lack of specialized or general risk capital and a lack of commercialization support
(technology transfer offices, incubators, deal flow facilitation etc.) for innovations. While the cluster
is performing well enough on the world stage, very few Dutch companies except for Philips are
globally competitive. In the Netherlands, there is little,
if any, commercial bank lending to start-ups or younger
businesses. The majority of capital for SMEs in the
medical device space comes from private equity and
venture capital firms such as Utrecht-based Gilde
Heathcare Partners. These firms typically provide up to
€10 mil/financing round. While deleveraging is on-
going due to the European crisis and could be a
contributor to the lack of risk capital, investments are still being made in the diagnostics segment in
the EU. xxi
NL lacks a commercialization infrastructure – In lean times, this makes NL-firms even
more vulnerable. Excluding the MNCs, analysis showed that half of the top 20 NL-based firms do
not have medical devices under development (Fig. 4.4.2). While the research institutions and
universities are generating innovations, there is a lack of incubators to commercialize products.
Related and Supporting Industries: Using world export share as a proxy for agglomeration,11
the
related clusters to medical devices - biopharmaceuticals, analytical instruments, education and
knowledge-creation and information technology are strong but their growth rates lag the medical
device cluster (2.5%-3.5% vs. 4.5%).
11 Agglomeration arises from interdependencies across complementary economic activities that give rise to increasing returns. Growth in world export
share is used as a proxy in this case. A strong cluster enables greater agglomeration economies, including larger pools of skilled employees, specialized suppliers, related industries and sophisticated buyers.
22
Chemical products is a globally-competitive supporting cluster and contributes to NL’s strengths in
diagnostic substances sub-cluster. Cross-sectoral efforts to promote internationalization could help
the medical device industry reap opportunities in product areas such as telemedicine and self-care.
Fig. 4.4.3: Related and Supporting Clusters Source: Institute for Strategy and Competitiveness
For IFCs, numerous professional bodies such as the Dutch Association for Technical Facility
Management in Healthcare (1947), the Association of Engineers in Healthcare (1971), the
Independent Association of Hospital Electronics (1978), the Association of Hospital Instrumentation
Engineers (1986) and the Medical Technology Conglomerate Organization (2009) help to create new
innovations. However, these IFCs lack a commercialization orientation. Only the Task Force
Healthcare founded in 2001 by Holland HealthTech, Philips Healthcare, Drager Medical
Netherlands, Simed International, AMPC, Maastricht University, and the Royal Tropical Institute is
focused on organizing trade missions to expand export markets for Dutch firms. It has completed
over 250 projects valued over €700M in Asia, Africa, Latin America, the Middle East and E. Europe.
The WHO has identified capability gaps in the use of imported medical devices in developing
countries; concerted efforts with the professional bodies to build capacity in these emerging markets
23
Fig 4.4.4: Employment in Top NL-based MNCs
Source: The Decision Group, Team Interviews and Analysis
Fig. 4.4.5: Philips and Siemens Customer Focus and
Performance
could raise mindshare of NL-made products and increase repeat sales by offering non-product and
bundled offerings (e.g. training, after sales services) to differentiate NL firms from their competitors.
Context for Firm Strategy and Rivalry: The NL medical device cluster is characterized by a small
number of large globally competitive companies (Fig.4.4.4) with employment share of more than
70 % and a large number of small Dutch SMEs. The share of employment of the top 10 firms within
the lifescience and medical device cluster has dropped from 80 % (2010) to 73 % in (2011) and
further consolidation is on-going. Johnson & Johnson closed in facilities in Groningen; MSD closed
its R&D Center in Oss,
affecting half of its 4500
jobs in Oss; the vacated
premises have been
converted for innovation
and R&D activities in Oss
life Science Park. While the consolidation reflects lowered investor confidence in Europe given the
crisis, improving operational efficiencies is insufficient to deal with lower margins and company
strategic response determines whether Dutch-based MNCs can weather the crisis better vis-à-vis
competitors. Siemens of Germany has prioritized emerging markets, achieving annual growth of
27 % in China, offsetting weakened demand in
Europe and US (Fig.4.4.5). Its German
workforce is retained to produce new products
and orders from emerging markets. xxii
Philips’
reliance on Europe and weak sales growth has
led to restructuring and layoffs.
24
Uncertainties exist in the EU and NL regulatory environment. Recent widely-publicized world-wide
recalls of particular prosthetics prompted a NL government report “Risks of Medical Devices
Understated” that called for increased transparency for quality outcomes and risks. An early
resolution clarifying specific requirements would establish regulatory certainty essential for
developing new products, particular those with long development cycles.
Demand Conditions: Like many nations, NL faces a rise in the health expenditures driven by an
aging population, which in NL is less well-off than nearby nations such as Germany. Its health
expenditures exceed OECD levels (Fig. 4.4.6). NL’s fragmented health insurance system was
replaced with the single statutory insurance regime, the Health Insurance Act (Zvw)xxiii
,with effect
from 1 Jan 2006. This harmonizes the local environment and increases market potential for firms:
Unlike other Western Europe countries where hospitals and care institutions are funded publicly,
NL’s individual care providers are privately-operated with profit-motives. This drives providers and
insurers to examine vertical integration within hospital systems such as HMO (e.g. Kaiser
Permanente) as a possible model from the US12
. Private insurers are responsible for running the
health insurance system. This decentralization has driven demand for more consumer-targeted,
technology enabled and integrated products and services. Given the Moroccan and Turkish
communities in NL cities, there is scope for specialized offerings for the Islamic community that
could address a growing sector for trade or medical tourism for the related hospital services cluster.
Turkey is a potential source given its 400 years of diplomatic relations with NL. xxiv
Compared with
its key EU competitor, Germany and other more conservative locations, the Dutch’s uniquely
tolerant nature and tradition of openness might permit the NL to innovate faster in related medical
clusters like biosynthesis and genetics that drives demand for sophisticated medical devices. Popular
12 Kaiser Permanente is a US-based integrated care consortium consisting of (i) Kaiser Foundation Health Plans which work with employees and employees to offer pre-paid health plans and insurance. The plans are not-for-profit and provide infrastructural investment in Kaiser Foundation
Hospitals and (ii) Permanente Medical Groups which are physician-owned organizations that arrange for medical care for Kaiser Foundation Health Plan members and are for-profit partnerships or professional corporations.
25
Fig. 4.4.6
Netherlands
Expenditure on
Healthcare
Fig.4.5.1 Comparison of NL Medical Device Cluster vis-à-vis competitors (Team Analysis)
Sources: (1) OECD Health Division (October 29, 2012); (2) WHO Department of Health Statistics and Informatics
(May 16, 2012); (3) Life Sciences and Health Care in China Opportunities, challenges and Implications, Deloitte, 2010.
Queen Maxima, both an immigrant and an investment banker, offers enormous leadership potential
as patron for new initiatives to meet social, economic and internationalization objectives.
In summary, the weak factor conditions and RSI/IFCs have resulted in a weakening CSR which sets
off a vicious cycle where MNCs leave, and the SMEs do not get sufficient commercialization
support. These issues contribute to NL’s weak growth performance in Section 4.3.
4.5 Comparative Analysis with Key Competitors and Mini Case Studies
Comparative analysis was conducted for the US (largest medical device market), Germany (key EU
competitor) and China (key emerging market competitor in multiple sub-clusters) (Fig. 4.5.1)
26
Comparative diamond analyses indicate that improvements in factor conditions (FC), RSI and CSR
can help NL raise its competitiveness. We examined (1) Commercialization infrastructure in
Mannheim, Germany as an example of improving FC, (2) Siemens’ China strategy as an example of
how to leverage RSI in Germany to capture growing Chinese demand, (3) Impact of FTAs on
exporting nations to show how NL can prepare ahead and improve CSR given the EU-USFTA.
Case Study (1): Supporting Commercialization (Mannheim, Germany) to improve FC
Mannheim is a small German city of 320 000 people, comparable to the Dutch cities focusing on
medical devices. Within an hour drive are 55 medical device firms (including 7 of top 15 MNCs), 6
University and Academic hospitals. xxv
Its key differentiator vis-à-vis the Netherlands is its strong
commercialization infrastructure: The 2 medical technology research units (IMT Mannheim Institute
of Medtech & Fraunhofer Institute of Production and Process Automation (Automation in Medtech
group) are focused on commercializing medical technologies. These are supported by 8 clinical
research organizations to help manage the life-cycle from innovation to product and startup
promotion at the MAFINEX Technology Center that offers business consulting, funding, office
space and shared services for innovative entrepreneurs. At the micro-level, Mr Elmar Bourdon heads
the medical technology section of the Office of Economic Development with the help of 15 specialist
staff conversant with medical technologies. Mr Bourdon is not the typical government official; his
previous positions include Product Manager (Siemens Healthcare) and Marketing Director (Abott).
Case Study (2): Leverage German RSI to Seize Demand Growth in China (Siemens)
Foreign MNCs have a 80-90% share of the high-
end medical equipment market in China.xxvi
Siemens tapped into the demand expansion in
China (Fig. 4.5.2) to offset stagnant growth in
developed economies by expanding entry-level
offerings. Every 4th
Magnetic Resonance and every 2nd
CT scanner by Siemens is now produced in
Fig. 4.5.2 Growth in Siemens China Operations
27
China. Its German workforce is integrated with the expanded workforce in China by providing
expert support (200 experts globally), training and product development. Siemens worked with ICT,
data analytics, software and mobile device partners to develop cost-effective entry-level imaging
products. In comparison, Philips Healthcare is shedding jobs in a state of consolidation.
Case Study (3): Preparing Ahead to Improve CSR by Seizing Opportunities with FTA
The US has many FTA linkages (Fig. 4.5.3). The free competition enhances the CSR for US-based
firms. From the US importers’ perspective, NL-based firms are at a disadvantage compared to firms
based in these developing countries as goods exported from NL attracts US tariffs whereas exports
from these developing economies do not. This contributes to the offshoring of MNC operations away
from mature economies (e.g. Medtronic shifted its International HQ to Singapore). The EU-US FTA
under discussion will level the playing field for EU-based firms vis-à-vis the developing economies
and could stem the offshoring tide. However, for the NL to maximize benefits from the FTA, the NL
government will have to play active roles to support EU negotiation in relevant clusters and setup
units to promote FTA utilization. Singapore’s exports to the US surged after the USSFTA, and the
increased FTA utilization is supported by specialized units in the trade promotion agency (IE
Singapore) working with trade associations to help SMEs export to FTA destinations.
Fig.4.5.3 US FTA Linkages, Tariff Rates for Countries without an FTA with the US and Percentage Changes in
Singapore’s Exports to US pre- and post-Singapore FTA .
28
4.6 Recommendations for the Netherlands Medical Device Cluster
Issues: The Medical Device Cluster is currently Netherlands’ leading export cluster. Nonetheless the
lack of globally competitive SMEs, the lack of commercialization of new innovations particularly by
these SME and the downscaling of MNC operations in this cluster if not reversed, will undermine the
cluster’s competitiveness and wage growth going forward. The competitiveness challenges identified
lead to 3 key questions, and corresponding recommendations are summarized in Fig. 4.6.1:
(a) For NL-based SMEs: (Q1) Do they have a sufficient pipeline of products under development
and (Q2) why are they not succeeding in the global market?
(b) For NL-based MNCs: (Q3) Why is their presence decreasing?
Competitiveness
Challenges/Opportunities
Recommendations Suggested Action
Parties
Priority
(1 highest)
Fa
cto
r C
on
dit
ion
s (F
C)
Difficulty to match
innovations with funds and
commercialization support
A. Incentivize risk capital
with tax credits and public
sector matching grants to
leverage private capital
A. Ministry of Economic
Affairs; Ministry of
Finance
1
B. Increase govt. support for
technology transfer offices
at universities and
increase the number of
medical device incubators
led by managers with
private sector experience
B. Ministry of Economic
Affairs; Ministry of
Social Affairs and
Employment;
Taskforce Healthcare
(TFHC), Philips
Healthcare
1
Dem
an
d C
on
dit
ion
s (D
C)
Opportunity to leverage
decentralization of healthcare
delivery brought about by
Health Insurance Act to cut
costs and produce innovative
medical devices
Opportunity to target needs
of multicultural community
C. Share info on quality,
outcomes and costs to
focus market on cost-
efficient and effective
products
C. Insurance companies;
Ministry of Health,
Welfare and Sport
2
D. Joint ventures between
industry, payers and
providers to offer
integrated products and
services for medical
tourism
D. Manufacturers,
insurance companies,
hospitals
2
E. Create special sessions for
Dutch-based SMEs to
present and make bids to
government buyers and
university hospitals
E. Ministry of Economic
Affairs; Ministry of
Social Affairs and
Employment
1
Co
nte
xt
fo
r
Str
ate
gy
&
Riv
alr
y C
SR
Uncertainties in EU and
US regulatory climate;
MNCs leaving and
consolidating
F. Seek private sector inputs
and staff negotiations for
medical devices in FTA
with the United States and
EU policy harmonization.
F. Ministry of Economic
Affairs; Ministry of
Foreign Affairs, IFCs
(professional bodies)
2
A
B
C
DI
EI
FI
29
G. Coordinated, concerted
investment attraction
efforts by Science Parks
and matching of
retrenched MNC staff to
existing NL-based firms
or to redeploy them to
help startups
G. Ministry of Economic
Affairs; TFHC; Science
parks involved in med
devices (Leiden,
Utrecht, Oss, Zernike
etc.)
1 R
ela
ted
an
d S
up
po
rtin
g I
nd
ust
ries
(R
SI)
Related clusters lag
behind the medical
device cluster in growth;
Lack of IFCs focused on
commercialization
H. Joint trade missions (e.g.
together with state visits)
to developing countries
with medical device actors
and those from related
industries;
non-product offerings and
training could help
differentiate NL firms
H. IFCs (professional and
TFHC);
Queen Maxima can be a
patron for TFHC
1
I. Create industry events for
medical device
multinationals and buyers
to Netherlands and
showcase SME
capabilities; target buyers
that visit Medica
Dusseldorf to extend time
in NL
I. IFCs, local heads of 8
NL-based medical
device MNCs
1
J. Create explicit cross-
cluster incubators that co-
locate medical device
companies and those from
related clusters (e.g.
pharma, ICT)
J. Ministry of Economic
Affairs, Science Parks
focused on medical
devices
2
K. Advocate for labor
flexibility for related
industries for joint
ventures with medical
device companies
K. IFCs 2
The recommendations are ranked based on a weighted assessment of their impact and the ease of
implementation.13
These recommendations and their prioritization are reflected in Fig. 4.6.2. The
color codes of the recommendations tag them to the 3 key questions: For NL-based SMEs - Red for
(1); Blue for (2), and for NL-based MNCs - Green for (3). The recommendations are described:
13 For assessing ease, the 4 criteria were degree of political support required, degree of behavior change required, multiplicity of actors involved, and
whether it is an extension of existing schemes. For assessing impact, the 2 criteria were potential impact and spillovers, and sustainability of the initiatives over time to engender further innovations. Each criterion was valued from 0 to 1 and weighted average was used to compute the final levels.
J
Fig. 4.6.1: Summary of Medical Device Cluster Recommendations
Priority 1 - < 6 mths, Priority 2 - < 1 year
K
G
I
HI
30
Fig. 4.6.2 Prioritization Matrix for Cluster Recommendations
Factor Conditions (A,B): In our interviews
with actors across the Dutch healthcare
spectrum, the lack of startup capital was a
consistent theme. Many SMEs cannot gain
financing required to bring innovations to
markets, reflected in the low number of new
devices under development by Dutch
SMEs. As government resources are
limited, a mix of tax credits and matching grants could incentivize the private sector, particularly
commercial banks, to invest in this space to bridge the funding gap. From our interviews, there is
great confidence in the ability of the NL-based SMEs to create new innovations but much less
confidence in commercialization. As in Mannheim, managers with private sector experience could
head technology transfer offices and incubators housed near the 8 university academic hospitals.
Demand Conditions (C, D, E): The escalating healthcare costs, the for-profit nature of medical
institutions in the Dutch healthcare system and the decentralization of healthcare delivery brought
about by the 2006 Health Insurance Act will drive demand for providers to offer more consumer-
focused, technology-enabled and integrated products, services and packages of care. First, the
government and insurance companies should focus on quality outcomes at reduced costs to drive
innovation. Second, manufacturers, insurers and hospitals must collaborate to yield the integrated
products required. There are opportunities, with intercession of the Dutch Royal Family, in
supporting investment and raising awareness of NL services. Premium telemedicine services such as
those required for remote treatment of the extensive Saudi Royal Family could raise the profile of
NL service providers and begin to take advantage of NL’s exceptional telecom drops to transfer real-
time high-resolution video. Lastly, to build markets for these products, the NL government should
provide opportunities for NL-based SMEs to pitch to government buyers and university hospitals.
31
Context for Firm Strategy and Rivalry (F,G): NL-based SMEs must be “born-global”, competing
at the international arena almost immediately given the small domestic market. It is imperative to
enhance market access for NL-based firms and to level the playing field vis-à-vis exporters in
developing economies that have FTAs for enhanced access to the US, the largest medical device
market. The Netherlands should prepare ahead, seek private sector inputs and staff negotiations on
medical devices and regulatory convergence to support Brussels in the EU-US FTA negotiations.
These staff would be in a good position to kickstart specialized units that gives NL-based firms
(particularly SMEs) a headstart vis-à-vis other EU-based SMEs to maximize FTA benefits. In the
immediate term, Science Parks could coordinate investment promotion efforts to attract and retain
medical device MNCs. The government could also work with IFCs and Science Parks to match
retrenched MNC staff to existing NL-based firms or re-deploy experienced ones to head incubators.
Related and Supporting Industries (H,I,J,K): For the medical device industry to sustain its
competitiveness, the RSIs must strengthen and enhance agglomeration effects. The government
should encourage incubators specifically focused on cross-cluster collaborations where firms or
R&D teams from different industries co-locate. IFCs must focus on attracting MNCs to the NL as
these MNCs bring global talent, technical expertise and global functions with positive spillovers to
the NL-based SMEs. These MNCs also help NL serve customers beyond the small domestic market.
To attract buyers and raise mindshare of NL-based SMEs, IFCs can work together for industry
events that showcase NL products and services. Medica Dusseldorf in Germany is the premier
medical device industry trade fair and conference. IFCs can target buyers and visitors to Medica
Dusseldorf to spend some time in NL and visit NL-based firms to assess partnership opportunities.
Lastly, Taskforce Healthcare (TFHC) could be resourced to further the internationalization of NL-
based SMEs. Professional Bodies could work with TFHC to provide capacity building and training
that differentiate NL firms. TFHC could seek Queen Maxima’s patronage and include trade missions
with state visits to promote made-in-NL devices.
32
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